Choo Chiang Holdings Ltd. Sustainability Report 2017

This Sustainability Report has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, SAC Capital Private Limited (the “Sponsor”), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the “Exchange”). The Sponsor has not independently verified the contents of this Sustainability Report. This Sustainability Report has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this Sustainability Report, including the correctness of any of the statements or opinions made or reports contained in this Sustainability Report. The contact person for the Sponsor is Mr Ong Hwee Li, at 1 Robinson Road #21-00 AIA Tower Singapore 048542, Telephone: +65

6532 3829.

Content

Board Statement 1

About Us 1

Sustainability Management Structure 2

Sustainability Reporting 3

Stakeholders’ Sustainability Concerns 4

Selected Materiality Factors 5

Training and Workplace Diversity 7

Supplier Assessment 10

Occupational Health and Safety - Road Traffic Safety

11

Other disclosures 12

GRI Content Index 13

1

Board Statement

Choo Chiang Holdings Ltd. is proud to publish the sustainability report for the financial year ended 31 December 2017 (“FY2017”), which is also our inaugural sustainability report (the “Report”). The Report, prepared in accordance with GRI Standards, demonstrates our commitment towards operational sustainability and corporate responsibility. The Management of CCH has

established a Sustainability Council and

a Sustainability Working Group, which

works under the guidance of the Board

to ensure that sustainability measures

are implemented across the business.

The Sustainability Council will measure

and review progress towards our

sustainability goals and engage

accountable stakeholders to ensure

targets are met.

Environment

Reducing the impact we have on the environment has been an important part of the way we have run our business for many years. We have proven that this approach brings lasting, mutual benefits to our business and the world in which we all live. During the year, we worked with waste contractors on our long-

term no-waste ambition. Besides reducing the impact on the natural environment through methods of waste management, and recycling disposable items such as copper and paper, we also raised employee awareness on critical issues in sustainable development through relevant initiatives. Governance

Corporate governance is at the heart of

our business in achieving our

sustainability goals. Building a system

in which high standards are upheld and

best practices are applied business-

wide is essential to our successful long-

term performance. We strive to

maintain integrity, transparency,

accountability and discipline in all our

practices and have put in place a robust

governance framework to ensure we

meet our objectives.

People

The Management recognises the importance of attracting, retaining and developing a high-quality workforce in order to ensure the long-term success of our business. We have invested in training employees to promote

professional and personal development as well as rewarding those who uphold our values within the organisation. Looking ahead, we hope to further improve our sustainability tracking through a target-based approach with clear and measurable metrics. In this Report, you will be provided with a balanced view of our position and performance with regards to some key issues and added-value measurements.

We hope you find the Report interesting

and informative as we continue our

sustainability journey.

For and on behalf of Board of Directors

of Choo Chiang Holdings Ltd.

About Us Choo Chiang Holdings Ltd. (“Choo Chiang”, “CCH” or the “Company” and together with its subsidiaries, the “Group”) is one of the leading retailers and distributors of electrical products and accessories in Singapore with a retail presence of more than 20 years. We offer an extensive range of electrical products and accessories for residential and industrial use at our 10 strategically located retail branches in Singapore. Our retail outlets are supported by a team of service oriented sales employees and a fleet of delivery vehicles. In addition to this Distribution Business, we also hold 12 investment properties which are rented out for rental income. The Group was listed on Catalist of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) on 29 July 2015 (stock code 42E). The Company continuously seeks for annual improvement over our sustainability practices and Report. We want to share our

sustainability journey and desire to hear from our stakeholders. We welcome stakeholders to submit any feedback or

suggestion to ccm@ccm.sg.

2

Sustainability Management Structure

Sustainability Council

The Sustainability Council (“SC”)

consists of 2 Executive Directors and 5

Executive Officers. They lead the way as

we continue our journey in

strengthening our sustainability

practices. The SC’s duties include:

• advising the board of directors

(“Board”) and recommending

business strategies in the area of

sustainability;

• providing recommendations to the

Board relating to the adoption,

implementation and monitoring of

sustainability-related policies;

• engaging the Board for approval of

sustainability initiatives;

• monitoring the implementation of

Board-approved sustainability

strategies;

• overseeing stakeholder

engagement and management,

including ensuring grievance-

handling mechanisms are in place;

• overall management and

prioritisation of sustainability

matters; and

• overseeing the preparation of

sustainability disclosures as

required by laws and/or rules, and

recommending to the Board for

approval.

Sustainability Working Group

We also aim to help stakeholders to

understand how sustainability issues

may impact the business, hence the

sustainability working group (“SWG”) is

formed by 5 Heads of Departments. The

SWG is also responsible for:

• coordinating and communicating

the sustainability information;

• sharing and promoting best

practices within the market and

industry;

• to engage with stakeholders on

environmental issues and

regulation affecting the current

business;

• provide the necessary coordination,

responding to authority, and

consultations on sustainability

related matters;

• supporting the Company on liaison

with Government departments,

regulators with regards to

sustainability reporting;

• recommending adequate resource

allocations that support policies,

programmes, and practice in a

holistic manner;

• identifying employee needs and

priorities that can be addressed in

the workplace and adopt

integrated comprehensive

approaches to address the issues;

and

• setting goals and objectives for

policies, programmes and practices.

Board of Directors

Human resources Finance Sales Purchasing Property

Sustainability Council

3

Sustainability Reporting In 2016, the SGX-ST introduced sustainability reporting on a “comply or explain” basis for all SGX-listed companies. Sustainability reporting will become effective for the Company from FY2017. The Report is in accordance with Global Reporting Initiative (“GRI”) standards – core option that contains the key materiality issues identified through materiality assessment and will be produced annually. As part of our commitment, CCH has engaged an external consultant to advise CCH in its preparation of the Report. Our approach to sustainability

CCH’s sustainability approach remains focused on value creation for all our stakeholders. The approach follows our sustainability policy which is to: • observe and comply with all

relevant legislation, regulations, and codes of practice;

• consider sustainability issues in key areas of impact and integrate these considerations in business decisions;

• ensure all of CCH’s staff and Management are aware of its sustainability initiatives and are committed to implementing, supporting, and measuring these activities; and

• review, report and continuously strive to improve sustainability performance.

Sustainability is managed across the business through relevant policies, programmes and operating procedures that are in place. These are shared with

all employees of CCH, supported with training and well-defined roles and responsibilities. This guides the Management of CCH on its decision-making processes and ensures that we continually deliver on our business principles across all of our operations.

We employ a risk-based management approach. This involves reviewing our policies periodically, adjusting how we work in the event of any breach, and reporting compliance levels. We believe that to meet our sustainability goals and live by our values we need to integrate best practices into our day-to-day operations. Our aim is to contribute to local economies where we have a presence as well as to create a workplace that brings out the best in our employees. Most importantly, we want to build a sustainable business based on trust. The Management is committed to integrating positive sustainability practices into our working environment and business processes. This is essential in order to deliver value to our business partners, foster trust with our communities, and ensure transparency and sustainable growth for our investors. Scope of report The scope of this Report covers all businesses of CCH and its subsidiaries. In defining the Report's content and the aspect boundaries, CCH considered the principles of materiality, stakeholder inclusiveness, sustainability context, and completeness. In determining the materiality factors, CCH has engaged

key stakeholders through various channels, including formalised surveys. The sustainability concerns from the various stakeholders were then consolidated and prioritised into a materiality matrix. Refer to the stakeholder engagement table and materiality matrix further below for more information. External charters and principles CCH’s policies and business activities are aligned to the global standards and are supported by a variety of external charters and principles. These include but are not limited to: • applicable provisions of the

Securities and Futures Act (Chapter 289);

• Listing Manual Section B: Rules of Catalist issued by SGX-ST;

• Code of Corporate Governance

2012; and

• other policies and procedures adopted by CCH, which can be found in CCH’s website under the corporate governance section at http://ccm.sg/www/corporate-governance.html.

Accordingly, we have developed and adopted a range of corporate policies and internal controls that support the Board and Management. These policies and controls cover matters such as personal data protection, conflicts of interest, business continuity, insider dealing, and enterprise risk management.

4

Stakeholders’ Sustainability Concerns

Our stakeholders are highly diverse, reflecting the breadth of our footprint within local reach of a global market. We have identified our main stakeholders’ groups using the GRI standards and have put in place processes for effective communication with the key stakeholders. Based on influence, representation, responsibility, dependency and proximity, we have narrowed down six main stakeholder groups. Understanding their key sustainability concerns is essential in building a sustainable business.

Stakeholder Engagement Table:

Investors & Shareholders

Means of engagement

Annual General Meeting

Sustainability Concerns

• Higher financial returns

• Property Management & market trend of

commercial real estates

Media / Public Relation

Means of engagement

Public conferences and events/ Press releases/

Publications

Sustainability Concerns

• Relevant company and industry

announcements

• Quality press releases

Government / Regulator / Authority

Means of engagement

Surveys/ Electronic communications / Annual

return

Sustainability Concerns

• High standards of corporate governance

• Regulatory compliance

Supplier/ Customer

Means of engagement

Electronic communications / Surveys/ Customer

Feedback Management

Sustainability Concerns

• Supplier Screening

• Order lead time

• Market presence

• Security of properties

• Customer service and quality of products

Employees

Means of engagement

Performance Plan Evaluation

Sustainability Concerns

• Competency development

• Performance management

• Fair employment practice & market

presence

• Workplace safety

Local Communities

Means of engagement

Electronic communications

Sustainability Concerns

• Road traffic safety

• Water conservation

• Waste management

• presence

5

Selected Materiality Factors

For the purpose of this Report, we completed a materiality assessment to define key aspects and indicators. Led by the Management, this assessment involved all levels of our identified key stakeholders and was guided by an external sustainability consultant. The key stakeholders of CCH were engaged via various platforms including formalised surveys. The sustainability concerns from the various channels were then consolidated and prioritised into a materiality matrix post consultation with the SC as shown in the matrix below:

Imp

ort

an

ce

to

Exte

rna

l E

nviro

nm

en

t

Importance to Internal Environment

Materiality Matrix

Training and Education

Supplier Assessment

Road Traffic Safety

6

Selected materiality factors (continued)

Materiality factors

Number Material Aspects

List of Indicators

Why has it been material? What are we doing to address this?

1 Training and Education

Average hours of training per year per employee by gender, and by employee category

The Company believes it is our people who make us competitive and enhancement to our employees’ skills is essential. CCH has a variety of training for employees, from ISO course to engaging auditor for IFRS update. The goal of this training is to help the appointees adapt to changes internally and externally, by boosting their knowledge about new standards, industry update, and internal affairs. The training attendance list has been built based on the job requirement and future development of each employee.

The Company designs and plans the training courses ahead in the year to address the job requirement and future development of employees. The Company keeps track of the training attendance list for administration and sustainability purposes.

2 Supplier Assessment

New suppliers that were screened using environmental criteria

We believe in the importance of ensuring appropriate sustainability measures are in place across our valued suppliers. This includes appropriate risk management procedures for outsourcing and procurement. We want to emphasis, not only the quality of supplier, but also the environments initiatives within the supplier. Ultimately, we share the view of preventing and mitigating negative environmental impacts from our supply chain.

We have rolled out a supplier assessment procedure, in which we only do business with qualified suppliers. The assessment includes obtaining the suppliers’ certification, such as ISO.

3 Road Traffic Safety

Operations with significant actual and potential negative impacts on local communities

We take responsibility for the road traffic safety of our employees and other road traffic users, doing everything in our ability to safeguard our employees and other road traffic users against accidents. Furthermore, we focus our efforts on helping our employees to continuously improve temporary or long-term safety. We deeply care about our employees and other road traffic users’ safety on the road, because we know the significant damage due to road traffic accidents.

We have issued the safe driving policy and educated our employees of the same. The Company also keeps track of the accident statistics, which cover occupational accidents and the lost work days caused by them.

Target Setting

We are in the process of gathering and measuring performance data to form a trend for the purpose of setting targets on the material factors as described above. Accordingly, the process of target setting is deferred till a time when adequate data is available to set realistic targets.

7

Training and Workplace Diversity

At Choo Chiang, we aim to be the

employer of choice for people who

wish to flourish in a diverse

environment with open

communication. As a responsible and

inclusive employer, we focus on the

professional development and well-

being of all our employees, with

respect and value for their diversity.

Besides encouraging our employees,

we also invested strategically in

various employee training programs

in new technology during FY2017,

including launching internal training

programs which offer opportunities

for progression mobility in the

organization. All employees are

constantly encouraged to look at how

they can integrate safety and regular

communication sharing sessions into

everyday ways of working.

Training for Directors

The Company recognizes the

importance of appropriate training

for its Directors. Directors are

constantly kept abreast of

developments in regulatory, legal and

accounting frameworks that are of

relevance to the Group through

participation in seminars and

workshops. The training of Directors

will be arranged and funded by the

Company. Please also refer to

Company’s annual report for FY2017,

the Principle 4 under Corporate

Governance Report regarding the

NC’s plan for the Directors’ training

and professional development

programs.

The Board ensures that incoming new

Directors are familiarized with the

Group’s businesses and corporate

governance practices upon their

appointment, to facilitate the effective

discharge of their duties. The

Company will also provide training

for first-time Directors. Each of the

Directors, upon their appointment,

has furnished a letter stating that they

are aware and have been informed of

their duties and obligations as

Directors. A formal letter will be sent

to newly appointed Directors upon

their appointment explaining, among

other things, their roles, duties and

responsibilities as members of the

Board. During FY2017, there were no

new directors appointed to the Board.

8

Training and workplace diversity (continued)

Briefing and updates provided to the

Directors for FY2017 included:

a) briefing by the Company’s

external auditors, Deloitte & Touche

LLP, on the key developments in

financial reporting and governance

standards at the half-yearly

meetings;

b) briefing by the Company’s Chief

Executive Officer (“CEO”) at each

Board meeting on business and

strategic developments of the Group;

and

c) news releases issued by SGX-ST

and the Accounting and Corporate

Regulatory Authority which are

relevant to the Directors and

circulated to the Board.

Training for staff

At Choo Chiang, Management

conducts annual training for staff on

various topics with multiple

purposes:

• An update on new internal

policy is going to be effected

• Technical training on

accounting, reporting and

taxation

• New staff training

• IT related training

In FY2017, there was a new

Enterprise Resource Planning

(“ERP”) system (Microsoft Dynamic

NAV) that had gone live in 2017 and

integrate with various modules,

including Sales, Purchasing, Finance

and Inventories Management.

Therefore, the Company has

arranged for 1,272 training hours to

introduce this new system to the

relevant staff, who will be working

on this new system.

The internal training for the

upgrading of employee skills allows

an organization to plan skills

acquisition that equips employees to

meet the Company’s strategic targets

in a changing work environment.

More skilled employees will enhance

the organization’s human capital and

contribute to employee satisfaction,

which correlates strongly with their

improved performance.

Some trainings require attendance

from the Sustainability Council.

Training programmes conducted in

FY2017 have been built based on the

job requirement of our employees.

Choo Chiang plans the agenda of

trainings that suits the business

requirement and also records the

training hours for all levels of staff,

whilst the details of the training in

2017 are set out in the following

page.

9

Training and Workplace Diversity (continued)

Training in 2017

168

1272

2017 total training hours

Annual training Training on new system

2016

Male Female

2017

Male Female

Average hours of training that the organization’s employees have

undertaken during the reporting period:

For female employees 15.16 training hours per

annum

For male employees: 6.13 training hours per annum

Average hours of training that the organization’s employees have

undertaken during the reporting period:

For Management :9.71 training hours per annum

For staff : 9.49 training hours per annum

100% of employees received a

regular performance and

career development

review during FY2017.

Percentage of male and female

employees in 2016 and 2017

10

Supplier Assessment

The Board recognizes the importance of developing and maintaining relationships with suppliers. As part of the Company’s internal control, it is a requirement to conduct an initial screening for all new suppliers. With the purpose of preventing and mitigating negative environmental impacts in its supply chain, Choo Chiang has assessed these criteria align with common international standard of ISO (International Organization for Standardization) or OHSAS (Occupational Health and Safety Assessment Series).

The supplier assessment will be reviewed and approved by Management.

Choo Chiang is benchmarking the suppliers’

assessment with the standards of either

• QMS - ISO 9001;

• H&S - OHSAS 18001;

• EMS - ISO 14001 or equivalent; or • Other current standards.

100% new suppliers in 2017 were screened

using environmental criteria

11

Occupational Health and Safety - Road Traffic Safety

As one of the leading retailers and distributors of electrical products and accessories in Singapore, our operation exposes the

local community to road traffic safety risks across our supply chain from purchasing of inputs to delivering of outputs. Our goal

is for drivers to return home safely at the end of each day. We emphasize the importance of keeping a safety mindset while

driving for work, and also during our commutes and when we are out enjoying time with family and friends. Our commitment

to road safety education extends throughout our Group, with additional, community-based initiatives in countries where we do

business.

We have a long-standing commitment to road safety. By issuing the road safety policy, we formalize our safety vision with our

employees. Furthermore, we support working conditions that allow each employee to fully concentrate on his or her work in a

healthy condition, including recovery from illness or incidents. We also log accidents involving employees as we believe we can

support them better during their recovery phase.

There was only one accident case was reported during the year which involved a lorry driver, out of 18 operating vehicles and

17 employed drivers. The accident did not result in any serious injuries.

12

Other disclosures

Economic performance

For FY2017, the Company recorded a revenue of SGD62.1 million (FY2016: SGD63.9 million) and profit before tax of SGD5.7

million (FY2016: SGD6.3 million). Earnings per share was SGD2.37 cents (FY2016: SGD2.58 cents).

Further details on our economic value and employee benefit plan can be found throughout the Annual Report.

During the year, no significant financial assistance was received from governments and the Company has no governmental

shareholders. In particular circumstances, we had received Special Employment Credit and Temporary Employment Credit from

local governments. Additionally, the Company has also been credited by the tax authority for the Productivity and Innovation

Credit Scheme in FY2017.

Governance structure

The important thing is to operate with integrity and we carry our operation with honesty and transparency. Creating

transparency is to provide information on structures and processes, areas of responsibility and decision procedures, as well as

rights and obligations of various stakeholders. Details on Corporate Governance and the Group Structure can be found in the

Annual Report.

13

GRI Content Index

GRI Number

Disclosure Title Cross-Referenced Sections

102-1 Name of the organization About us

102-2 Activities, brands, products, and services About us

102-3 Location of headquarters About us

102-4 Location of operations About us

102-5 Ownership and legal form About us

102-6 Markets served About us

102-7 Scale of the organization About us

102-8 Information on employees and other workers Annual report

102-9 Supply chain Annual report

102-10 Significant changes to the organization and its supply chain Annual report

102-11 Precautionary Principle or approach Not applicable

102-12 External initiatives Engagement Stakeholders’ Sustainability Concerns

102-13 Membership of associations Annual report

102-14 Statement from senior decision-maker Board Statement

102-15 Key impacts, risks and opportunities Annual report

102-16 Values, principles, standards, and norms of behavior Board Statement

102-17 Mechanisms for advice and concerns about ethics Annual report

102-18 Governance structure Other disclosure

102-19 Delegating authority Annual report

102-20 Executive-level responsibility for economic, environmental, and social topics

Board Statement

102-22 Composition of the highest governance body and its committees

Annual report

102-23 Chair of the highest governance body Annual report

102-24 Nominating and selecting the highest governance body Annual report

102-25 Conflicts of interest Annual report

102-26 Role of highest governance body in setting purpose, values, and strategy

Annual report

102-27 Collective knowledge of highest governance body Annual report

102-28 Evaluating the highest governance body’s performance Annual report

102-29 Identifying and managing economic, environmental, and social impacts

Annual report

14

GRI Content Index (continued)

GRI Number

Disclosure Title Cross-Referenced Sections

102-30 Effectiveness of risk management processes Annual report

102-31 Review of economic, environmental, and social topics Annual report

102-32 Highest governance body’s role in sustainability reporting Annual report

102-33 Communicating critical concerns Annual report

102-34 Nature and total number of critical concerns Annual report

102-35 Remuneration policies Annual report

102-36 Process for determining remuneration Annual report

102-40 List of stakeholder groups Stakeholders’ Sustainability Concerns

102-42 Identifying and selecting stakeholders Stakeholders’ Sustainability Concerns

102-43 Approach to stakeholder engagement Stakeholders’ Sustainability Concerns

102-44 Key topics and concerns raised Selected material factor

102-45 Entities included in the consolidated financial statements Annual report

102-50 Reporting period Sustainability Reporting

102-51 Date of most recent report Sustainability Reporting

102-52 Reporting cycle Sustainability Reporting

102-53 Contact point for questions regarding the report Sustainability Reporting

102-54 Claims of reporting in accordance with the GRI Standards About Sustainability Reporting

102-55 GRI content index GRI content index

201-1 Direct economic value generated and distributed Other disclosures

201-3 Defined benefit plan obligations and other retirement plans Other disclosures

201-4 Financial assistance received from government Other disclosures

308-1 New suppliers that were screened using environmental criteria

Supplier Assessment

403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

Road Traffic Safety

404-1 Average hours of training per year per employee Training and workplace diversity

404-2 Programs for upgrading employee skills and transition assistance programs

Training and workplace diversity

404-3 Percentage of employees receiving regular performance and career development reviews

Training and workplace diversity